Setting prices is one of the biggest challenges for any business. You might know how to service gutters like a total pro, but finding the right cost for your services can leave you lost in economic theory. Fortunately, there are a few easy steps you can take to ensure you get paid a fair amount for servicing gutters while remaining competitive with the local pros. Thanks to new technological innovations and business management software, even the smallest gutter cleaning companies can set prices with the accuracy of a Wall Street investment firm.
But what steps should you take to set the right prices for your gutter cleaning services? What kinds of calculations do you need to make? Why is this process so important in the first place, and how can new technology help you receive fair payment for servicing gutters? Let’s find out:
Without clear, consistent prices, no one would understand the true value of products and services. You might argue that prices stabilize the entire economy, including industries like gutter cleaning.
The key to setting a price range for your gutters is consistency. You need to rely on an effective estimating and pricing structure every time you clean a customer’s gutters. Removing the guesswork from this process ensures quicker turnaround times, better lead capturing and stable growth as you service gutters in your community.
If you fail in this process, your business could suffer permanent damage or even bankruptcy.
The best way to keep pricing consistent every time you service gutters is by creating a formula. The most basic formula for setting prices is as follows:
Let’s break this formula down:
Your cost of doing business includes everything you spend to service gutters. This cost may include:
As you can see, there are many costs you may not have considered for the average gutter cleaning service. It’s important to take into account all of your expenses when setting prices for your gutters. If you fail to factor everything in, your real profit margins may be much lower than your projected profit margins.
Another important value in our formula is the “markup factor.”
Although this might sound like a complicated term, calculating the markup factor before you head out to service gutters is really quite simple. You just take 100% of the cost associated with servicing gutters and add your markup. Your markup is the amount of money you plan to take home on each service.
For example, you might have a markup of 35%. If this is the case, then your markup factor for your gutters would be 1.35. Let’s also assume that your total average cost for a theoretical gutter cleaning service is $1,000. Putting everything together, the formula would look like this:
Cost = 1000 x 1.35
You would send this gutter cleaning price to your customer before heading out to clean their gutters.
There are other variations of this formula that you might want to try. For example, you could work backward starting with the price for servicing your gutters:
By working backward in this manner, you can easily determine your budget for each gutter cleaning service based on a target price. For example, you might know for sure that you want to bill $750 to compete with other gutter cleaning companies in your area. Assuming your markup factor is 1.35 once again, you would be left with the following formula:
In other words, you have just $556 to spend on all of the aforementioned costs associated with servicing gutters. If you run the numbers and figure out that this budget is too low to cover your expenses, you need to set higher prices for your gutters (or lower your markup). Otherwise, you’ll lose money after you finish cleaning those gutters.
While these formulas can certainly be helpful as you set prices, you still need to know your cost and markup in order to make your calculations.
So how exactly do you do that? The answer is simple: Research. This is one of the many reasons the research stage is so important before you even start your business and clean your first gutters.
Let’s start with the cost of doing business. A solid strategy is to ask other gutter cleaning companies for guidance. If your local competitors aren’t willing to talk, you can always contact companies that service gutters in another state or county. Check out online forums – your questions have probably already been answered by people who service gutters every day.
Keep in mind that many costs fluctuate. An obvious example is the cost of fuel, which continues to rise throughout the decades. Inflation also pushes up the cost of virtually all equipment and supplies. This includes ladders, brushes, hoses, water wand variants and cleaning solvents. Inflation may be so rapid that your profit margins decrease notably within just a few months.
This is why virtually all businesses need to take their pricing strategy seriously – including gutter experts who have been servicing gutters for decades and those who are just starting out. Re-calculating your prices, cost of doing business and markup on a monthly basis is a solid strategy in this environment of high inflation.
There are two main pricing strategies for gutter cleaning companies:
The name says it all: This strategy involves pricing that stays the same. You don’t have to run calculations every time you head out to clean gutters – just refer to your fixed pricing system and bill that amount at the end of the project. For example, you might charge a flat fee of $1,500 per house.
The obvious disadvantage is that various factors can affect your profit margins. Some houses take longer than others to complete. Some gutter-cleaning work is more demanding. One house might be further away than another, representing a higher fuel associated fuel cost. Factors such as these can make your real profit margins inconsistent.
With this method, you set unique prices for each service based on projected costs. Using the aforementioned formula, you can calculate exactly how much you need to charge in order to achieve a certain profit margin. This makes your earnings much more predictable and consistent, although customers tend to appreciate the simplicity of a flat fee structure. Another potential downside is this method’s time-consuming nature.
With all that said, it is becoming much easier to make complex pricing calculations in the modern era. This is thanks to streamlined estimating solutions such as VIIZR. As one of the few trades-focused estimating tools available, VIIZR is geared toward small businesses with limited time and resources. This mobile-friendly tool lets you create estimates with just a few taps.
At the end of the day, the best choice depends entirely on your preferences and your unique needs. Although a fixed-cost system is clearly more straightforward, calculations may be easier than you think with modern business management tools. Regardless of which option you choose, transparency and communication with your customers is vital. Make sure they know exactly how your pricing system works before you show up to clean their gutters. This helps avoid disputes and confusion when it’s time to send your invoices.
One of the most basic economic principles is the relationship between supply and demand. This relationship has the ability to drastically affect prices across the entire construction industry. So what exactly is supply and demand?
Supply is the availability of a certain product or service, while demand represents how badly people want that product or service.
If supply is low, prices increase. For example, you might be the only person capable of servicing gutters on a remote island with a moderate population. You could set high prices in this scenario because your customers will be competing to schedule your limited supply of time. If supply is high, prices decrease and you’re servicing gutters alongside hundreds of other companies offering the same services, you might need to cut prices to compete. The same logic applies to a grocery store that accidentally orders 200,000 bananas. Since they ordered so many, they’ll need to set low prices to offload them as quickly as possible.
But what about demand? If demand is high, prices increase. Perhaps a major storm left gutters clogged throughout your community. Suddenly, demand goes through the roof (no pun intended) – and you can set higher prices as a result. Why? Because there are only so many gutter cleaning companies in your area, and you only have a certain supply of time available. This illustrates the close relationship between supply and demand. If demand is low, you might need to lower your prices in order to increase demand and attract new customers.
So what exactly does this all mean?
In order to set effective prices, you need to consider the market forces in your local area. This includes the availability of gutter cleaning services in your area (supply), and how often customers need their gutters cleaned (demand).
The only way to determine demand is to find out how many other companies are currently servicing gutters in your area. This “detective work” should be one of the first things you do before you start servicing gutters. Thanks to the internet, it should be easy to find out the number of companies that are servicing gutters with a quick Google search.
But you need to find out more than just the number of companies servicing gutters in your area. You also need to know their pricing systems. Find out how much they’re charging to clean the average set of gutters. Run the numbers and set a pricing structure that keeps you competitive. Although it might be tempting to undercut everyone else, it’s best to set your prices somewhere in the middle. Remember, your competitors are setting these prices for a reason – they’ve already calculated the market forces of supply and demand in your area. A low price may also be a red flag for a customer – indicating poor quality or shady business practices.
You might also want to consider the most common pricing strategy in your area. Are companies using a fixed cost system or are they calculating cost per project? This is one area where you can stray from the norm and offer customers something new. For example, they might appreciate the simplicity of a flat fee if everyone else in your area is using a per-project pricing system.
If you can’t seem to find your competitors’ pricing online, consider reaching out for a quote. There’s usually no need to actually follow through with the gutter cleaning service, and you can request multiple quotes from gutter cleaning companies in your area. This helps you get a sense of what your own prices should be when servicing gutters.
If you’ve been servicing gutters for a while, you might feel justified in demanding higher prices. This is certainly a viable strategy, especially if you have established strong relationships with your customers over the years. When your customers trust you to clean their gutters effectively, they’re unlikely to walk away – even if you raise your prices a little.
On the other hand, you might need to set your prices near the low end if you’re just starting to clean gutters for the first time. It takes years of solid customer service to establish these trusting relationships, which means it’s in your best interest to provide your clients with positive experiences from the get-go. The sooner you establish that sense of trust, the sooner you can raise your prices.
Fortunately, you can rely on software tools like VIIZR to boost customer satisfaction levels. Not only does this mobile app make estimating, invoicing, and other interactions more convenient, but it also offers a Customer History feature. This feature allows you to save customer preferences for later reference – ensuring positive, consistent results.
You should also consider the fact that you can charge different prices for cleaning home gutters compared to cleaning commercial gutters. The process is quite different for a number of reasons. Commercial gutters have different designs and openings compared to home gutters. In addition, you’re more likely to see flat roofs on commercial buildings as opposed to sloped roofs on home buildings.
You might choose to focus on cleaning home gutters rather than commercial gutters (or vice versa). Picking a niche is always a solid choice, as it helps you target qualified leads who are actively searching for your services. The general consensus is that commercial trades work pays more than home services – but this may depend on your unique circumstances.
Speaking of flat vs. sloped roofs, you might want to consider roof access when setting prices before servicing gutters. Some roofs are very simple to access – including flat commercial roofs. Others, such as sloped, three story home roofs, are more challenging.
Safety equipment may be required, and this can add to your overall cost. The process of accessing difficult roofs may also be more time-consuming, adding to your labor cost and affecting your profit margins. This is just one example of why calculating your prices on a per-project basis is a smart move.
Even the most sophisticated software cannot answer questions specific to your local area. AI can’t tell you about the labor shortages in your community, or whether you need to buy an extra step ladder before you head out to clean gutters.
But software can help you streamline the overall estimating process. With tools like VIIZR, you can finish and send your estimates with just a few clicks. Your customers will receive clean, professional PDF estimates that help you get the green light and clean more gutters per week.
If you go over your initial quote, you can charge your customer a higher cost after cleaning their gutters. A quote or an estimate is not a contract – and you are not legally obligated to honor the initial price. But don’t expect your customers to be happy when you send them a higher bill after cleaning their gutters. To reduce these disputes and unwelcome surprises, rely on software like VIIZR to create accurate estimates from the get-go.
In addition to the factors we've already mentioned, there are many other subtle forces that may affect prices. It’s important to recognize how the construction industry as a whole reacts to various external changes. Here are a few examples:
Backlog is a term that you’ll hear frequently throughout the construction industry. When a gutter cleaning company has a backlog, it means that many customers are waiting to have their gutters cleaned. This can be either a positive sign or a cause for worry – and it can affect pricing.
A backlog means that you can move on to new customers as soon as you’re finished cleaning your current set of gutters. Backlog indicates high demand, and it could be a sign to increase your prices.
However, too much backlog can be negative. It shows that you’re taking on more gutters than you can handle. It may be caused by prices that are too low – causing a flock of customers that quickly overwhelm you. If you face this problem, you may end up turning customers away – damaging your reputation in the process.
Labor is one of the biggest expenses for most trade businesses (if not the biggest cost). While you might feel confident about your wages remaining consistent throughout the next few years, things can change faster than you realize.
Inflation is rapidly causing workers to demand higher wages. You should also consider new minimum wage laws spreading across numerous states and jurisdictions. In a few months, you may be legally obliged to pay your workers more – and your customers may still expect the same prices.
On that same note, inflation is pushing up commodity and material cost for trade businesses. You won’t need to spend a fortune on materials when servicing gutters, but the cost of cleaning products is definitely increasing. The major inflation-related cost, however, is fuel. Cleaning gutters is a mobile business, and your fuel bill can start to eat into your profit margins in an environment of high inflation.
First of all, it’s important to periodically re-calculate your profit margins due to rapid inflation. Secondly, you need to take advantage of business management software that can lower these operating costs. For example, VIIZR comes equipped with an advanced mapping and routing feature that helps you choose the most efficient routes. With VIIZR, you’ll spend less time on the road, lower your gas bill, and clean more gutters per week.
Finally, there are a variety of unpredictable factors that could disrupt the field services market. For example, there might be a sudden labor shortage. Perhaps a new company has arrived in town with plenty of new job opportunities, and now there’s no one who wants to service gutters.
Supply chain disruptions can suddenly make it impossible to service gutters because you don’t have the right equipment. Even if you do manage to get your hands on the supplies you need, you might spend a fortune on them just to get a set of gutters cleaned. As we have seen, pandemics and global emergencies can also stop you from servicing gutters. All of these factors can affect pricing.
As you can see, setting prices before you service gutters is anything but straightforward. Simply slapping a price tag on your services without any research could backfire.
Fortunately, it’s easier than ever to create detailed estimates and streamline this entire process with VIIZR. Take it for a test drive today and reduce time-consuming paperwork. There is no obligation, so try VIIZR free for 14 days.